Western New York factories boosted hiring in June

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The modest growth spurt at Western New York factories extended into its fourth month during June as manufacturers stepped up their hiring for the first time in nearly a year.

A new survey of local purchasing managers found that growth at the region’s factories picked up a little steam last month, although the overall pace of the expansion remains moderate.

“It looks like a bit of an uptick in employment and a bit of growth in manufacturing,” said Jay K. Walker, the Niagara University economist who compiles the report that offers one of the earliest glimpses at how a key part of the local economy is faring.

The National Association of Purchasing Management–Buffalo said its index of business activity at local factories show growth picked up slightly in June, after the pace of the expansion had weakened in May.

The group’s index strengthened to 53.2 last month, up from 52.8 during May, as the spurt of new hiring at local factories offset continued weakness in production and the flow of orders. An index reading of more than 50 signals growth.

Nearly all of the improvement during June came from a hiring surge that saw 33 percent of the firms surveyed add to their workforce, up from just 11 percent in May. That pushed the group’s employment index into growth territory, at 63.1 – the highest reading that benchmark has hit since August 2010 and the first time it has shown growth in the local factory workforce since last July.

“Employment was a bit of a bright spot locally,” Walker said.

Those gains offset weakness in production and new orders that could be a worrisome sign for local manufacturers in the coming months.

Production declined for the sixth straight month, although Walker noted that the rate of decline has stabilized since the beginning of spring and is fairly close to the point where output could begin to show gains.

The survey found an even split between the number of managers reporting increased production at their firms and those saying output declined during June.

The flow of new orders weakened for the second consecutive month, although the pace of the decline slowed in June, with the group’s new order index improving to 47.6 from 45 in May. As with the production index, the number of managers reporting an increase in new order and a drop in such orders was evenly split.

Inventories, which jumped to their highest levels since last summer in May, grew much more slowly in June, with just 22 percent of managers surveyed reporting growing stockpiles at their firms, down from 56 percent in May.